Philip Morris' Climate Transition Plan: Net Zero by 2040

Philip Morris International (PMI), the largest provider of smoking and 'smoke-free' products in the world, has published its 2025 Climate Transition Plan, outlining the path it plans to take en route to achieving net zero greenhouse gas emissions by 2040.

The plan follows the disclosure framework put in place by the Transition Plan Taskforce, a UK initiative first launched in 2022 that is designed to act as a gold standard for decarbonisation strategies.

PMI's latest strategy also acts as a more well-rounded and up-to-date successor to its Low-Carbon Transition Plan, published in 2021.

The document sees the firm set a range of interim targets for 2030, including a 50% reduction in absolute Scope 1 and 2 emissions, a 33.3% reduction in Scope 3 emissions related to forests, land and agriculture, and a 27.5% reduction in Scope 3 industrial emissions.

Progress on each of these goals will be measured against a 2019 baseline.

"In a moment when it would be easier to extend timelines or hedge our ambitions, PMI has chosen to hold firm to its 2040 net zero commitment across all scopes," explains Jennifer Motles, the firm's CSO.

Revenue growth alongside emissions reductions

Data from the World Health Organization shows that levels of smoking have been in steady decline since the turn of the millennium. In the year 2000, one in every three adults used tobacco products.

When levels were last gauged in 2022, that proportion had dropped to one in five thanks to increased awareness about the dangers of smoking, as well as regulations and taxes.

Despite this sizeable drop-off, PMI has enjoyed great financial success over the past decade.

"Our net revenues have increased by more than a quarter between 2019 and 2024 – strongly driven by our smoke-free business," says Jacek Olczak, PMI's CEO, referring to the rise in popularity of products like vapes and snus.

"Yet, within the same timeframe, we have consistently reduced greenhouse gas emissions, not only within our direct operations – where our control is greater – but also throughout our broader value chain, which accounts for the vast majority of our overall impact."

Indeed, despite the demands put on its manufacturing operations increasing, PMI has made some impressive inroads on its decarbonisation goals.

Looking ahead, the firm expects that it will achieve carbon neutrality for its Scope 1 and 2 emissions by the end of 2025, after which point it plans to put more focus and resources toward reducing its Scope 3 emissions which, as is the case with most companies, makes up more than 90% of its carbon footprint.

Is agriculture Philip Morris' biggest challenge?

As is laid out in the Climate Transition Plan, PMI regards its agricultural supply chain as the area of its business most vulnerable to climate-related risks.

The company's tobacco supply chain accounts for the majority of its land-use-related emissions, with fertiliser use identified as a key contributor.

"Most of our material climate- and nature-specific impacts, risks and opportunities originate from our upstream value chain activities, particularly in our agricultural supply chain," the company states in the document.

PMI has implemented its Forest Positive programme for over 10 years, emphasising forest conservation, restoration and sustainable land use to reduce emissions.

The company is also promoting regenerative agriculture practices with a focus on carbon sequestration, aligned with its FLAG commitment.

External dependencies acknowledged

The plan explicitly acknowledges significant external factors beyond PMI's control that could affect its ability to meet its 2040 net zero target.

These include technology readiness gaps, supplier capability constraints, renewable energy availability and infrastructure limitations.

"While Scope 3 emissions represent over 90% of our total carbon footprint and are largely influenced by external factors, we see significant opportunities to drive change, notably through strategic partnerships and supplier engagement efforts," the plan states.

PMI has developed a Supplier Confidence Model to estimate the likelihood of supplier-driven emissions reductions toward 2030 targets.

The company's Sustainability Accelerator programme began with a handful of suppliers in 2023 and expanded to reach 50 suppliers in 2025, accounting for 70% of its direct material footprint.

Product portfolio trade-offs

The elephant in the room with modern smoking businesses is that vapes and electronic cigarette products (like heaters) present their own, very significant challenges, including the waste of plastic and electronic components.

These products are generally require more energy-intensive manufacturing processes too, which PMI acknowledges openly in the Climate Transition Plan.

PMI is already addressing these issues through sustainable design practices, device collection programmes and by extending device lifespans through repair and refresh initiatives.

In its data, the PMI is applying a shadow carbon price in investment evaluations and has been using internal carbon pricing mechanisms since 2020, all in an effort to wrangle its manufacturing impacts more effectively.

Regardless of the progress the firm is making, there is still a long way to go when it comes to cutting down on waste, emissions and plastic usage.

"This isn't about being perfect – it's about being purposeful," says Jennifer.

"It's a statement of trust in each other, in our partners, and in our collective ability to create the systems we need."